"I'm setting up a company in Panama and I no longer pay taxes." You've already come across this promise — in a video, at a conference, or in an online ad. So let's ask the real question: does it actually work? And at what cost?
Short answer: no, not like that. Not legally. Not sustainably. But there is an honest version of this idea — actually leaving, creating a real business, working there — that does hold up. This guide explains the difference, without jargon, without selling dreams. And if you trade, it helps you understand why the country you live in matters as much as the strategy you apply.
Offshore: what exactly are we talking about?
The word "offshore" literally means "off the coast." In the business world, it refers to a company registered in a country other than the one where its director lives. Nothing illegal in itself: a French person who moves to Portugal and founds a company there is already doing "offshore" in the broad sense.
The problem is never the nationality of the company. The problem is where the decision is made and where the work is done. Picture a shell: beautiful on the outside, empty on the inside. A letterbox company is exactly that — an address, a stamp, a bank account, but no real activity on site. The French tax authority calls this an artificial entity, and it has tools to spot it.
Conversely, a company with offices, a director present, employees, local invoices and decisions made on the territory: that is a real structure. And a real structure, in a country where you genuinely live, is perfectly legal.
In practical terms, for you: the question is not "where do I register?" but "where do I live, where do I decide, where do I work?" That answer is what determines your tax situation.
Economic substance: the heart of the matter
Economic substance is the proof that your company really exists where it is registered. Not just on paper — in fact. Think of a restaurant: a glowing sign is not enough, you need a kitchen, a chef, customers and plates coming out. The criteria that a tax authority generally examines:
- Premises: an office, a commercial space, not just a post office box.
- People: a director who lives on site, local employees, possibly real subcontractors.
- Decisions: strategic choices (hiring, contracts, investments) are made over there, not from your living room in France.
- Activity: customers, invoices, bank flows consistent with what you declare.
Why is this central? Because without substance, a foreign company managed from France risks being considered as having its place of effective management in France — in other words, the place from which it is actually run. Translation: the French tax authority can decide that your company, even if registered elsewhere, is French for tax purposes. And then, you pay tax in France — plus possible penalties.
In practical terms, for you: if you spend your days trading from Lyon and your company is in the Bahamas, you are not expatriating. You are just going through the motions. And it shows.
Permanent establishment: the classic trap
A permanent establishment is a business presence in a country that creates a tax obligation in that country. A simple image: if you set up a crepe stand in Brittany in the summer, you pay taxes in Brittany — even if your company is registered in Marseille.
In practice, a permanent establishment can exist without a fixed office: sometimes all it takes is a space at your disposal, an agent who concludes contracts for you, or an activity carried out habitually. Tax treaties between countries — those agreements that allocate the right to tax — specify the rules, but the principle remains the same: where you actually do business, there you are taxed.
For an independent trader, the question comes up quickly: if you trade from France for a foreign company, you are probably creating a permanent establishment in France. And your tax "advantage" evaporates.
International transparency: the world has changed
In the past, foreign accounts lived in the shadows. Today, not really anymore. The CRS (Common Reporting Standard) is a system for the automatic exchange of information between tax administrations. Imagine a global postal network where each country automatically sends to your home country the list of your accounts and income. That is exactly it.
As a result: hiding an account or a company abroad has become very difficult. And forgetting it in your French tax return exposes you to heavy penalties — to be verified with the tax administration, as the amounts change.
This transparency has a positive side: it protects those who do things properly. If your structure is real and declared, you have nothing to fear. If it is not, you live with a sword hanging over your head.
Articles 209 B and 123 bis of the French Tax Code: the French response
France is not naive. Two provisions specifically target arrangements without substance.
Article 209 B of the French Tax Code allows the administration to include in the taxable income of a French company the profits of a foreign entity it controls, if that entity is subject to a privileged tax regime (meaning: very lightly taxed or not taxed at all) and if its activity is mainly carried out in France or consists of intra-group services. In short: you cannot have a foreign shell work for your French company and hope that the profits escape tax.
Article 123 bis of the French Tax Code does the same for individuals. If you hold directly or indirectly 10% or more of an entity established in a country with a privileged tax regime, and that entity has mainly passive income (interest, dividends, royalties), that income can be taxed in France in your hands — even if you have not received it.
These articles do not target real businesses. They target arrangements. The distinction always rests on the same criteria: substance, real activity, location of decisions.
To give you a sense of scale, here is a useful reference point from the French system, for purely informational purposes: corporate tax is 15% up to €42,500 of profit (subject to SME conditions), then 25% above that. And an individual receiving dividends is taxed via the single flat-rate withholding — the "flat tax" — of 30% (12.8% income tax + 17.2% social contributions). These reference points are meant to help you understand the order of magnitude, not to decide anything.
What is legal, what is risky: the reading grid
Here is how to sort this out honestly. No marketing nuance, just the facts.
- Legal and consistent: you physically settle in a country, you create a company there, you work there, you pay your local taxes there, you declare your situation in France (tax residence, foreign accounts via form 3916).
- Legal but demanding: you keep a French company and a foreign subsidiary with a real local activity, employees, customers. The substance must be demonstrable at any time.
- Risky: a foreign company managed from France, with no office or employee on site. You expose yourself to reclassification as a permanent establishment or place of effective management.
- Illegal: concealment of accounts, fake invoices, nominees, shell companies. There, we leave the field of optimization for that of tax fraud.
My opinion, assumed and purely educational: most beginners looking for "offshore" are actually looking to avoid tax without changing their lives. That does not work. The traders who succeed sustainably abroad are those who have actually moved, who have built a local activity and who have accepted paying taxes somewhere. The rest is noise.
And it is not just a matter of money: leaving also means changing your pace, your time zone, your bearings. Better to prepare it as a project in its own right, not as a tax shortcut.
💡 Concrete case
You are a trader in a prop firm and you receive about €8,000 per month in payouts (order of magnitude, to be verified according to your contract). You are considering creating a company in Portugal and settling there.
Scenario A — you really settle there: you become a Portuguese tax resident, you create a local company, you make your decisions there, you declare your departure in France (art. 4 B of the French Tax Code), you check the exit tax (art. 167 bis) and you declare your accounts via form 3916. You pay Portuguese tax according to local rules — to be verified with a local accountant.
Scenario B — you stay in France: you create the same company, you manage it from your office in Nantes. The French tax authority may consider that the company is French for tax purposes. You then pay corporate tax in France, plus possible penalties. Your "advantage" disappears, and you add legal risk.
The difference between A and B is not the paperwork. It is your actual presence.
Demographics and context: why the country matters
The choice of country is not neutral. A country with a young, dynamic population, a French-speaking community and an accessible administration will always be simpler than an isolated tax haven. The United Arab Emirates, Portugal, Cyprus, Malta or Singapore attract entrepreneurs for various reasons: taxation, quality of life, ecosystem. Their populations, languages and administrative structures are very different — to be verified depending on the country targeted, as the rules change quickly.
A few orders of magnitude to give you some perspective (to be verified before any project): the United Arab Emirates has about 10 million inhabitants, the vast majority of them expatriates, with English as the working language and Arabic as the official language. Portugal is around 10 million inhabitants, with an aging population but cities like Lisbon and Porto that are very attractive to foreign entrepreneurs, and a well-established French-speaking community. Cyprus is around 1.3 million inhabitants, with Greek and Turkish as official languages and English widely used in business. Malta has just over 500,000 inhabitants — a small territory, high density, English official. Singapore is approaching 6 million inhabitants, with four official languages including English, and a young and very international population. In all these cases, a French-speaking community exists, more or less dense depending on the cities.
A point often forgotten: the more present the French-speaking community is, the more easily you will find an accountant, a lawyer and peers who understand your situation. It is a safety factor, not just a comfort factor. To compare destinations, our glossary and our country guides are a good starting point before digging deeper.
Pitfalls to absolutely avoid
- Believing promises of "zero tax": no serious country works like that. Preferential regimes exist, but they require a real presence.
- Forgetting the departure declaration: French tax residence (art. 4 B of the French Tax Code) is not lost just because you changed address. It is lost when you demonstrate that your home and economic interests are elsewhere.
- Ignoring the exit tax: Article 167 bis of the French Tax Code can tax unrealized capital gains on securities at the time of departure. To be verified with a tax lawyer.
- Not declaring your foreign accounts: form 3916 is mandatory. Forgetting it is costly.
- Setting up a structure without substance: this is pitfall number one. You think you are saving, you risk paying double.
- Starting without support: a tax lawyer and a local accountant are not a luxury. They are your insurance.
- Confusing speed with haste: a successful relocation is prepared months in advance — residence, bank, accountant, school if you have children, health insurance. The tax authority looks at facts, not intentions.
And for the trader on the move?
If you trade from abroad, two things really change your daily life: time zones and discipline. Following the New York session from Dubai is not the same story as from Paris. Your sleep rhythm, your market hours, your ability to stay focused: everything shifts.
This is where the trading journal becomes your best ally. Writing down your sessions, your mistakes, your emotions — especially when you change countries — helps you stay on course. The JARVIS Method insists on this point: technique never replaces rigor. And rigor travels with you. That is also why our member area offers a complete trading journal (screenshots, result, mini psychological test) and a "My Trading" hub with your statistics: what gets measured improves.
Moving also disrupts your physical and mental condition. Poorly managed jet lag, neglected lifestyle habits, and the best method loses its effectiveness. The "My Fitness" section and the mindset coaching on the platform exist precisely for that: preparing the body and the mind as much as the charts.
For the market monitoring part, the JARVIS METHOD indicator on TradingView and the position calculator help you keep a clear framework, wherever you are — the details of the settings remain reserved for members. And if you want to lay the foundations properly, the complete and structured training pathway (with bootcamps, mentoring and events) covers everything, from beginner to advanced.
What to remember
- Creating a company abroad is legal if you really live and work there.
- Economic substance (premises, director, decisions, activity) is the central criterion.
- Without substance, you risk reclassification as a permanent establishment or place of effective management in France.
- Articles 209 B and 123 bis of the French Tax Code allow France to include the profits of foreign entities that are lightly taxed and lack substance.
- CRS makes concealment of accounts very difficult.
- Tax residence (art. 4 B), exit tax (art. 167 bis) and form 3916 are points of vigilance that must never be neglected.
- French tax reference points to keep in mind: corporate tax at 15% up to €42,500 of profit (subject to SME conditions), 25% above that; 30% flat tax on dividends for an individual.
- No decision should be made alone: a tax lawyer and an accountant are essential.
Your concrete step, starting now: write down in black and white where you live, where you make your decisions and where you work. If these three answers do not point to the same country, you have your answer — and a good file to prepare with a professional. To go further on rigor and organization, our training pathway and our JARVIS reads are there for that.
This content is educational and informational. It constitutes neither investment advice, nor legal advice, nor tax advice, nor immigration advice. Tax rules, thresholds and conditions change quickly: always verify with the competent official authorities (impots.gouv.fr, consulate, local tax administration) and consult a qualified professional before any decision. Trading involves a risk of capital loss; past performance does not guarantee future results.